Applying a steady hand as 'private-sector' colleges face scrutiny

One side of the card is standard — white background, corporate logo, contact information for the headquarters in Downers Grove.

The flip side is dramatic, painted ripe-tomato red with white letters. It spells out the company's mission, which not only reflects the DeVry Inc. CEO's keen interest in corporate leadership philosophy, and buzzwords, but, he says, represents the guideposts he has used to navigate the most tumultuous period in the for-profit education company's eight-decade history.

Business cards and Hamburger's calm demeanor belie recent turmoil in the for-profit education business. It has been a manic era of tremendous prosperity slammed to a halt with a sudden, brutal onslaught of negative publicity and government scrutiny.

As recently as 2010, DeVry enjoyed rocketing enrollments and plush profits. Since then? Stock-price plummets, from more than $70 a share in 2010 to $25.62 on Friday, and rampant layoffs — it said in July it would eliminate 570 jobs, or more than 5 percent of its staff. Meanwhile, the whole for-profit industry had to endure scrutiny by the Department of Education, Congress, consumer groups and the media.

The worst accusations allege that such colleges use strong-arm tactics to recruit poor people and veterans and then provide an inferior education while charging too much, saddling students with debt and wasting taxpayer money on loans the students can never repay.

But even the harshest critics concede that's not the case at all for-profit colleges and that such schools have a role to play in retraining America's workforce for the types of jobs available today.

In 2011, he took a leadership role in testifying before a Senate committee investigating the alleged sins of private-sector colleges. He has bucked his industry's view, saying schools' eligibility for federal funding should depend on how well they graduate students and place them in jobs without sinking them in crushing debt.

Hamburger said he's not afraid of being measured by whether DeVry students get jobs in their fields of study, a controversial concept in the industry called "gainful employment" that DeVry has been reporting since 1975.

"We did it before it was cool," he said. The goal is 90 percent placement at DeVry, although it has fallen short of that in recent years.

As for serious allegations against other for-profit schools?

"If there are bad acts or bad actors in the private sector or the public sector, they need to be held accountable, including shutting them down," Hamburger said. Last year, Career Education Corp., a Schaumburg-based for-profit college chain, admitted some of its schools cooked the books on student job-placement rates, and its CEO resigned in the wake of the scandal in 2011.

All this tumult has come amid a frail economy and tepid employment market in which the perceived link was broken between investing in more schooling and getting a better job — the main selling point for a career-oriented school. Hamburger says the economy, not the damaged reputations of private-sector colleges, is mostly to blame for the recent financial problems of DeVry and its competitors.

Through the industry's whiplash of fortune, Hamburger has been a steady hand at DeVry, colleagues and industry watchers say.

The key, the 49-year-old Hamburger insists, has been committing to the credo on his business card, which, simplified, calls for doing what's right for DeVry students, regardless of what's going on in the media or Washington or on Wall Street.

All good things for DeVry, including a return to higher profits, will flow from that, he says.

"People believe Daniel because they know he tells the truth, and in a way that can be understood by the audience," said Lyle Logan, executive vice president of Northern Trust Co. and a DeVry board member.

When Hamburger was honored in December with an award by the Anti-Defamation League at a Chicago banquet, it was Logan who stood at the podium and introduced him. He said Hamburger, with his strong analytical skills and integrity, has been well-suited to dealing with the challenges of the private-sector college business in recent years.

"His real skill set is to truly understand, at a detail level, what makes the organization tick," he said.

An industry leader

DeVry Inc., which traces its founding to 1931 in Chicago and counts about $2 billion in annual revenue, operates career-focused schools in such fields as business, health care and technology, serving more than 125,000 students at physical locations as well as online. It operates under names including DeVry University, Chamberlain College of Nursing, Carrington College, Ross University and Becker Professional Education. It also has several schools in Brazil with about 27,000 students.

DeVry caters to so-called nontraditional students, often older students with families. They're usually trying to gain skills for specific careers rather than another diploma after high school. Unlike community colleges and state universities, DeVry is a for-profit company. But Hamburger will thank you very much for not calling his schools "for-profit" colleges. He prefers the term "private-sector" colleges, contending that traditional universities make plenty of profit. They're just "nontaxpaying," he quips.

In an industry with some notoriously bad schools and questionable practices, DeVry is among the good guys, said Peter Wahlstrom, an industry analyst with Morningstar.

"DeVry worked fairly closely with regulators and accrediting bodies to make sure it was staying in very good standing," he said. "It is very proactive, so it can be looked at as one of the leaders in the industry."

Hamburger has been integral to that, he said.

"I think he's doing a good job in managing through a difficult environment," he said. "He's always upbeat. He's a glass-half-full kind of guy. That's the sort of person you would like to see at the helm."

A scathing report on private-sector colleges, the result of a two-year investigation by a Senate committee, was released last year. It hammered for-profit colleges' aggressive recruiting tactics, high costs, high dropout rates, low job-placement rates and high rates of default on taxpayer-backed student loans.

It didn't let DeVry off the hook, saying its schools had costly tuition and mediocre student withdrawal and loan-default rates, which was concerning. But it also said "the leadership of DeVry has demonstrated a commitment to investing in students and student services, and in engaging in a dialogue to improve, steps which distinguish the company from others in the sector."

It praised DeVry for career-placement services, controls on its recruiting practices and receiving few complaints from students. The report even cited one of the many mantras repeated among executives at DeVry headquarters, school administrative offices and in Hamburger's testimony before the committee: "Our organizational philosophy can be summed up as, 'Quality leads to growth.'"

Besides DeVry, Hamburger is also a leader in other organizations, including being a board member of World Business Chicago and America's Promise Alliance.

Rita Athas, departing president of World Business Chicago, whose mission is to attract and retain business in the city, said Hamburger is "a real asset to the Chicago business community and to the city as a whole because he has a real sense of civic responsibility."

"He is very thoughtful, weighs in on the issues, really cares about what we're doing and is pretty passionate about it — to the point where he'll periodically give me articles he thinks I should read, which is great," she said. "He understands that a skilled, educated workforce is what makes the city grow."

Athas said Hamburger's style as a board member is friendly and accessible.

"He's not a pound-on-the-table type of person. But people listen to what he says because he is so thoughtful."

Inquisitive at heart

The third of four boys, Hamburger grew up in the Detroit suburb of Oak Park, Mich. His father was a doctor.

"None of us became doctors, but I've got a medical school," Hamburger joked, referring to Ross University School of Medicine.

He graduated from the University of Michigan, the only school he applied to. All his brothers and extended family went there too.

"It's all we knew," he said. "Heaven forbid if somebody went to (Michigan) State."

He pursued an undergraduate degree and master's degree in industrial engineering and graduated in 1986.

"It's all about solving problems and optimizing systems," he said of his major. "I drive people crazy asking, 'Why is that the way it is?'"

Besides problem-solving, another love was music. He played the classical violin and piano growing up and was in an orchestra for nonmusic majors at Michigan. Today, he continues to play violin with two of his sons, who play the piano and banjo.

After college, Hamburger went to work for Andersen Consulting, now Accenture, implementing computer systems at Ford Motor Co. in Dearborn, Mich. Meanwhile, his high school sweetheart and wife, Denise, went to law school at Michigan. Then the couple flip-flopped roles. She became a lawyer in Boston while he pursued an MBA at Harvard Business School, graduating in 1990.

Then Hamburger headed overseas, working for Bain & Co. consulting in London and then Poland. During his 20s, he was among the consultants helping Poland to privatize its economy after the fall of communism in the early 1990s.

"It was fascinating," he said.

Then it was back stateside to Bain in Boston for a year before coming to Chicago in 1994. He held various executive posts with R.R. Donnelley, W.W. Grainger and Indeliq, a subsidiary of Accenture.

Hamburger joined DeVry in 2002 as executive vice president for DeVry Online and Becker Professional Education. Two years later, he was chief operating officer, and in two more years, chief executive.

Nowadays, Hamburger, a resident of Glencoe and father to three boys, rises at 5:35 a.m. for a workout, then a shower during a commercial break of "Morning Joe" on MSNBC. Then he heads out the door in time to take one of his sons to school at New Trier High School before making the 45-minute commute to DeVry headquarters in Downers Grove.

He fills the commute time listening to audiobooks or his Portuguese language lessons on CD — DeVry has made a strong push into Brazil, where mostly Portuguese is spoken.

Among his duties is hiring top executives. Susan Groenwald, president of DeVry's Chamberlain College of Nursing, was one.

She remembers well the interview process with Hamburger.

"He's very thorough and very intense — he's an engineer, which might explain a little bit," she said. "When I first interviewed with him, he was a little bit imposing and intimidating because he had very difficult questions and checked a lot of references — and called them several times. But what I learned about him was what an absolute delight he is to work for, because he is a leader who not only espouses values, but lives them."

A CEO in bad times too

The most satisfying part of Hamburger's job, he says, is talking to people, employees inside DeVry and people externally, whether about DeVry or more generally about higher education and job training.

Indeed, as CEO, he sees his job largely as a communicator, about half communicating inside DeVry and half talking to the outside world.

Outward communication is not always easy.

Take Oct. 26, 2011. That's when Hamburger appeared live on CNBC on a day DeVry's stock price got crushed and the company was downgraded by an important Wall Street analyst after it missed quarterly profit targets.

"Your stock is getting walloped, but we appreciate you still coming on," the show host fired flippantly. "How do you defend your stock today?"

Hamburger calmly explained how DeVry was helping to train workers for jobs that were going unfilled and his belief that its services will be in demand despite any short-term hiccups.

Why did Hamburger agree to appear on the show during such a bad day?

"It's about transparency. It's about accountability," Hamburger said. "As a CEO, you can't just be there for the good times."

Hamburger is not overly gregarious, full of wild stories, or a yelling, fist-pumping type of CEO. But when the topic turns to leadership philosophy, you can see the energy build in his body language.

He casually cites leadership gurus, such as Jim Collins, author of "Good to Great: Why Some Companies Make the Leap … and Others Don't" and organizations with great culture, such as Disney and Nike. He pivots to an article written by A.G. Lafley, former CEO of Procter & Gamble, in the Harvard Business Review, then cites a comment from a meeting he was at with General Electric CEO Jeff Immelt.

"That's one of the things that motivates me — I'm interested in the art and science of management," Hamburger said.

Hamburger will need to draw on the best lessons of corporate leadership as DeVry deals with declining enrollments, a stock price down about 60 percent from what it was 18 months ago and what might continue to be a hostile regulatory environment.

But at root, the strategy will be simple, he said.

"If we take care of our students, everything else will take care of itself."

Involvement: Boards of America's Promise Alliance and World Business Chicago. He is a member of The Economic Club of Chicago, The Commercial Club of Chicago, Young Presidents' Organization and CEOs Against Cancer.